We’ve already talked about the predictions for 2014 regarding the real estate and mortgage market. But what about predictions for yourself? What does your 2014 look like? Unless most of us can find a way to curb our spending, the picture might be a bit bleak. So to make sure that you do indeed have a very happy New Year, here are a few tips on how to curb your spending.
Figure out where your money goes
You may just know that you don’t have a lot of extra money to go around – but do you know where to spend it? If you don’t know where you’re wasting your money, you don’t know where you can try and save it. Write down every single expense you have for at least four weeks, but take it even further and even longer than that if you can. You’ll start to see patterns, and those areas in which you’re wasting money and spending where it’s unnecessary to do so will immediately be evident to you.
Make a spending plan
We often talk about budgets, and just the word is enough to get some people tuning out. So instead of laying out a budget – a bunch of restrictions that tell you what you can’t do – make a spending plan. A plan that will tell you where you’re going, and that allows you to do whatever it is that you want. Write down all the expenses you’re going to have, including those that are for niceties, such as going out to the show or out for dinner once a week. Then, you simply don’t spend on anything that’s not on that list. This one goes hand in hand with the first tip. Once you know where your money’s going, you’ll have more control over what you do and don’t spend.
Pay in cash
It’s easy to get in over your head when you can whip out a credit card at any moment and buy what you need. Instead of doing that though, give yourself a cash allowance every week and make sure you don’t dip into your bank account or your credit limit at all. Parting with precious cash is much harder than just making a charge for something.
Update your goals, lists, and plans regularly
No one can be expected to maintain the same spending and saving habits for their entire lives. And if you restrict yourself to just one plan or just one budget, this will quickly help lead to the feeling that it’s simply too constrictive. Be sure to review your plans, goals, and habits regularly and adjust them as needed. This doesn’t mean allowing room for big splurges or simple wants. But it does mean that you do have some wiggle room for when life’s situation changes, and you need to simply give yourself a bit more breathing room – or a bit less, such as those times when you really need to ramp up your debt repayment.
